UNITED STATES (OBSERVATORY) – Germany intends to obtain from the US indulgence for German companies that cooperate with Russian companies or individuals who fall under the new US sanctions, writes The Wall Street Journal.
German Finance Minister Olaf Scholz intends to discuss this issue during his visit to the US this week. In turn, German Chancellor Angela Merkel will discuss this topic with US President Donald Trump during the meeting in April.
German companies are urging Merkel to demand that the US mitigate or create conditions that will allow German companies that have business in Russia not to suffer because of the deterioration of relations between the US and Russia. New US sanctions have been introduced against a number of Russian companies and individuals, including state officials and representatives of the business community.
The ban on doing business with these companies and individuals applies to organizations and companies operating in the US market.
Among the German companies working with Russian sanction companies are Siemens AG, Daimler AG and Volkswagen AG. The Germans note that anti-Russian sanctions can jeopardize the work of the joint venture, as well as keep banks from financing new projects in Russia. All this will cost Germany dearly, losses are estimated at hundreds of millions of euros.
“We have very bad feelings about the current sanctions spiral, and we hope that everyone who is involved in this will quickly understand that it is always better to reduce the heat,” said a representative of Uniper SE, which is involved in the construction of the Nord Stream- 2 “.
The trade turnover between Germany and Russia increased in 2017 to 54.5 billion euros against 45 billion euros in 2016, despite the anti-Russian sanctions. Investments of German companies in Russia exceeded 20 billion euros.
For its part, the Eastern Committee of the German Economy (Ost-Ausschuss der Deutschen Wirtschaft), which represents the interests of large German companies operating in Russia and Eastern Europe, requires the protection of these companies. In particular, German industrialists believe that the US can make an exception for the JV and Russian investments made before the introduction of sanctions.
The US Treasury has the authority to allow companies to conduct business with companies that are subject to sanctions. Scholz and Merkel intend to let the United States know that they are aware of the fears of German business, but do not intend to support any kind of relief.